Straight From Hughes’ Mouth: Radio One Founder Kills Financial Rumors Once & For All

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Hughes on how Radio One is performing currently:

“We’re holding on. We’re not thriving now. No radio corporation is thriving. Some have filed bankruptcy. The auto industry was our number one source of advertising. When the auto industry tanked, when Detroit went bankrupt, it trickled down to radio, in particular black radio.”

Hughes on why Radio One considered the reverse stock split option:

“It hasn’t occurred! We never took that option. If the stock market got crazy again, we wanted to be able to [have that option]. Stock analysts who [talked about us considering that option] are like [all] people–everyone has an opinion. What happened was, we simply asked for permission [to take a reverse stock split option] at our annual shareholders meeting, and subsequently received permission, should we care to do that. Our stock now is going back up close to $4. It was much lower before.

We just wanted to make certain we had a safety net should the market [face difficulties] again, because those are situations beyond our control. But, I understand, some people are not happy that we’re surviving. Only two [radio companies] in the whole industry were not in financial trouble [during the recession] and folks are not happy that one of those two is a black company. That’s the name of the game.”

 

On her crusade against the ‘Performance Rights Act’:

{Editorial Note: the Performance Rights Act (HR 848) is a bill that would require radio stations to pay royalties to artists whose music they play on the radio}.

“Music companies are very wealthy corporations that have historically beaten artists out of their money. When the [Performance Rights Act first was introduced], we agreed that artists should be paid back. We came up with a proposal that would put together a $20 million fund that would go back to the artists exclusively. The [music industry] said no, because none of the money would go back to the record industry. Yet, that industry is already sitting on top of $100 million from the performance tax that satellite and new media pay through Sound Exchange. You know, [Sound Exchange] was created by Congress, and all of their filings are public information. [I discovered that] at the end of 2008, they had [millions of] dollars in the bank that they claimed they couldn’t find artists to distribute to. Now, what motivation would you have to give away $100 million, if [there’s a legal provision] that after 3 years, you could keep it? After 3 years, if they can’t “find” an artist, Sound Exchange can keep that artist’s royalties.

Aretha Franklin called me and said girl, I cannot believe that these idiots are claiming that they can’t “find” me. I said “they’re not idiots, the legislation was flawed and so [Sound Exchange] gets to keep the money after 3 years if artists don’t show up to claim their money].”

I’m [against the Performance Rights Act, because] I already spend $14 million a year paying the writers and the publishers. It’s a record company’s job to pay the performers. I don’t even know a performer exists until a record company brings me a finished product! It’s like having to pay child support for a baby that’s not yours. I agree the baby should be supported, but I ain’t the mama! Those artists should definitely be paid by the record companies that are ripping me off. We don’t know even know that Rihanna exists—we don’t even know the girl is born—until the record company walks in and says here is the new release by a new artist named Rihanna.

Plus, our radio stations already give up billions of dollars of free advertising. The reason satellite and Internet radio pay a fee to Sound Exchange is because they charge for their services. We are free radio. We don’t charge for our services. They were foolish not to fight it. Satellite radio was going through that big merger, and they didn’t want to stir up the waters. They’re trying to back out of it now…and it’s a big mess for satellite radio. And, with Internet radio, people are very much into piracy.”

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